GPC Annual Report 2007

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Government Procurement Card

Annual Report 2007

Achieving Efficiency

Savings in the UK Public Sector


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Contents

Preface 2

Savings 3

Statistics 3

GPC Visa and reducing environmental impact 3

Growth 4

Sectors 6

Frequently Asked Questions 7

Suppliers 7

Purchasers 7

Support to users 8

www.purchasingcard.info 8

User Groups 8

GPC eSolutions 8

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Preface

The year 2007 has been a year of achievement for the

OGCbuying.solutions GPC Visa programme. Not onlywas this the tenth year in operation, but also three key

milestones were reached:

the cumulative spend through GPC Visa

surpassed 3bn;

the cumulative savings attributed to GPC Visa

exceeded 500m;

and the number of customer programmes has now

exceeded 1,000.

Each of these milestones is testament to the ongoing

success of the GPC Visa programme and the key role it

has played in improving public sector efficiency. A wide

range of public sector organisations have used GPC Visa

to improve their procurement practices.

Procurement continues to be a major part of the

Governments modernisation agenda. In 2007 we saw

the publication of two important documents that impact

on the future for public sector procurement: 2007

Comprehensive Spending Review1 and Transforming

Government Procurement2. Both documents make it

clear that public sector procurement will play a major

role in delivering savings over the next three years. GPC

Visa will be a critical tool for enabling public sector

organisations to modernise their procurement practises

as they continue their drive towards greater cost savings

and greater efficiency.

GPC Visa is an excellent example of the public and private

sectors working in partnership. OGCbuying.solutionsworks with Visa Europe and each of the six GPC Visa

issuing banks, to support the roll-out of new programmes

and to increase the efficiency of established programmes.

Our partnerships continue to strengthen and in 2007

we have also seen the introduction of a number of new

initiatives, including the GPC eSolutions service which

offers customers the ability to review, modify and import

electronic card spend data directly into a variety of

financial management systems, offering greater efficiency.

Departments, Councils and Universities continue to find

innovative uses for GPC Visa, in particular the lodging

and embedding of card details with suppliers and service

providers has proved to be extremely successful. I applaud

the work of these progressive and forward-thinking

organisations, however, we also believe there to be many

other opportunities where GPC Visa can help customers

to streamline their purchase to pay processes.

If public sector organisations are to meet the demanding

targets for monetary savings set out in the 2007

Comprehensive Spending Review they must continue to

effectively manage their procurement activities. One of

the long term goals of every public sector organisation

should be to have a detailed understanding of how they

spend their money, with whom and what they receive in

return for their money. I strongly believe that GPC Visa

can play a fundamental role in managing this activity, and

I would encourage all public sector organisations to take

full advantage of this well-proven technology.

Jim Parkinson Payment Cards Category Manager

OGCbuying.solutions

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G o v e r n m e n t P r o c u r e m e n t C a r d A n n u a l R e p o r t 2 0 0 7

1: 2007 Pre-Budget Report and Comprehensive Spending Rev iew, Cm 7227 Meeting the aspirations of the British people, HM Treasury, 9 October 2007

2: Transforming Government Procurement, HM Treasury, 23 Januar y 2007


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Statistics

In just ten years, GPC Visa has become one of the most

successful government purchasing card programmes inthe world. In 2007 there were an additional 261 schemes

initiated which represents a 31.77% growth rate. New

schemes took the total number of GPC Visa schemes in

operation past the 1,000 milestone.

Savings

The growth in use of GPC Visa has resulted in an increase

in savings available to organisations using the programme.

This year alone GPC Visa has enabled over 130 million

of savings3 to be made across the UK public sector.

Since 1998 GPC Visa has been responsible for over 500

million of efficiency savings3.

GPC Visa and reducing environmental impact

GPC Visa continues to contribute towards reducing

organisations environmental impact by reducing the

amount of paper required in the purchasing process. On

average an organisation saves 10 sheets of A4 paper forevery purchase made using GPC Visa. In 2007, GPC Visa

saved public sector bodies from processing 47,333,050

sheets of A4 paper. The energy required in the process

to produce this amount of paper would generate

approximately 182.2 tonnes of CO2. This figure does not

account for the energy which would also be required

to transport, print and dispose of the paper. GPC Visa

is therefore not only helping the public sector to speed

up their purchasing processes and save money, but is

also helping organisations to reduce their impact on the

environment.

Table 1:2007 infi

gures

Table 2:Statistical growth in 2007


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3: Savings calculated using the National Audit Office approved figure of 28 per transaction

4: Paper savings based on an estimate of 10 sheets of A4 paper saved per transaction

5: Carbon savings based on an estimate of the carbon used to produce one tonne of paper

Percentage increase against 2006 in:

Schemes 31.77%

Cards 19.74%

Spend 17.66%

Transactions 22.04%

2007 in figures

GPC Visa schemes in operation 1,041

GPC Visa cards in use 112,397

GPC Visa spend 795,427,070

GPC Visa transactions 4,733,305

Average spend per transaction 168.05

Monetary savings 132,532,5403

Paper savings (sheets of A44) 47,333,050

Carbon savings (tonnes of CO25) 182.2


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Growth

In 2005 there were 70,095 cards across all of the GPC

Visa schemes. By 2007 the number of cards had increasedto 112,397, an increase of 60.34%, see Figure 1 (right).

The slower growth in the number of transactions per

card over the last three years may have been caused by

the large numbers of cards that have been issued during

the same period. Figure 2 (right) illustrates the changing

growth in average numbers of transactions per card.

Since 1998, GPC Visa has been used to make purchases

amounting to 3 billion. Figure 3 (right), shows how this

total has grown year on year since the contract was first

let in 1998. The total amount spent through the GPC Visa

programme has also increased in 2007, rising 17.66% to

almost 800 million. This years spend accounts for 25% of

the cumulative spend over the life of the programme. The

annual number of transactions also grew by 22.04%.

The bar chart figure 4, (overleaf) shows not only how

much the savings have increased year on year but also

how quickly these savings have accumulated.

GPC Visas reach continues to extend across the

public sector

Fig 1: Total number of schemes and total number of cards (100s)

Transaction volumes on GPC Visa continue to

show steady growth

Fig 2: Average number of transactions per card

In 2007 GPC Visa spend rose by 17.66%

Fig 3: Total annual spend


04

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

200

0

400

600

800

1000

1200

2004

2003

2002

2001

2000

1999

1998

2007

2006

2005

1bn

800m

600m

400m

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0.00

Savings()

2007

2006

2005

2004

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2002

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2000

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10

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No. of Schemes No. of Cards (100s)


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The increasing volume of savings made by GPC Visa

Fig 4: Cumulative and Annual GPC Visa savings


05

Cummulative Savings

Annual Savings

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

0

100m

200m

300m

400m

500m

600m

Savings

()


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Sectors

As GPC Visa schemes continue to grow we usually see

a growth in the average transaction values on the cards.Although this is only a relative indicator, an increased

average transaction value tends to indicate that a scheme

is becoming more mature. Average transaction values

have increased every year since 2000. Table 4, (below),

shows the average transaction values ranked by sector.

Table 3: GPC Visa transactions and spend by sector

Table 4: GPC Visa programmes and card data by sector

The average transaction value can be used as an indicator

to assess how a scheme is developing. In most cases,when a schemes average transaction value increases, this

is due to the organisation choosing to either raise the

card limits imposed on users of the cards, or that card

use has been extended to cover new areas of spend. Both

situations imply that an organisation is confident with

using the cards and that the scheme is progressing and

maturing well.

6: The Third Sector is made up of voluntar y and community groups , social enterprises, charities, cooperatives and mutuals. Not all members of the third sector are eligible to have a GPC Visa scheme, only those

that are considered to be a contracting authority under regulation 3 of the Public Services Contracts Regulations 1993 as amended by the Public Contracts (Works, Services and Supply) (Amendment) Regulations

2000.

06

Central Government 3,233,584 178.61 577,541,289

Local Government 1,028,937 152.80 157,223,614

Education 375,963 132.73 49,900,711

Health 31,574 166.66 5,262,089

Third Sector6 63,247 86.95 5,499,367

Total 4,733,305 168.05 795,427,070

The expansion of GPC Visa use in Local Government and Education continues

Use of GPC Visa in Central Government continues to lead the way

Sector

No. of

Programmes No. of Cards

Average cards

per Programme

Average Transactions

per Card

Average Spend

per Card

Central Government 360 79,009 219 41 7,310

Local Government 284 20,833 73 49 7,547

Education 286 9,473 33 40 5,268

Health 51 1,381 27 23 3,810

Third Sector 60 1,701 28 37 3,233

Total 1,014 112,397 108 42 7,077

Average

Sector Transactions Transaction Value Spend


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Frequently Asked Questions

Suppliers

Im a supplier to the public sector. What do I need to do to

accept GPC Visa?

If you already have the facilities to accept payment by Visa

you need do nothing else. Simply inform your clients that

you accept payment by Visa.

If you are not capable of accepting payment by Visa you

need to become a Visa Merchant by signing a merchant

acquiring contract with one of the banks offering anacquiring service.

If you are a public sector organisation and you want to

accept payments by Visa, OGCbuying.solutions has

recently let a new Framework Agreement for merchant

acquiring services 7. For further information on accessing

this framework please contact OGCbuying.solutions.

Contact details can be found at the end of this report.

Im a supplier and can already accept payment by Visa but my

customers have asked that I provide Line Item Detail (LID)

information. What is this?

Line Item Detail (LID) refers to enhanced transaction

data that includes descriptive details of each good or

service purchased in a transaction. LID data includes

defined tax information that can be used as VAT evidence

and a customer-defined reference. LID data also classifies

goods and services by means of commodity codes.

Purchasers

Im a purchaser in the public sector and want to use GPC Visa.

What should I do?

GPC Visa is available from a consortium of GPC Visa

Issuers. Contact details of all the GPC Visa issuing banks

and OGCbuying.solutions can be found at the end of this

report.

I already use GPC Visa. How I can use it more?

Advice and support on how best to use GPC Visa

can be gained from a range of sources:

Online at www.purchasingcard.info and at

www.ogcbuyingsolutions.gov.uk

Your GPC Visa issuing bank

Other bodies using GPC Visa

We have negotiated corporate contracts for many of our

goods and supplies. Can GPC Visa help us ensure compliance

to these contracts?

GPC Visa can ensure compliance through monitoring

of transactions. Some organisations have chosen to

use embedded or lodge cards with some of their

suppliers. These cards have also been integrated into

e-procurement systems to deliver contract compliance.

Your issuing bank will be able to advise you on how bestto implement these cards.


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7: Framework title: Government Merchant Acquiring; fr amework code: RM32701; www.ogcbuying.solutions.gov.uk


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Support to users

The support available from Visa Europe and OGCbuying.

solutions comes in a variety of forms from general adviceand guidance, through to products and services designed

exclusively for GPC Visa users.

www.purchasingcard.info

The official GPC Visa website can be found at www.

purchasingcard.info. The site provides access to a

wealth of information concerning GPC Visa including

best practice guidance, case studies and the previously

published annual reports. The site has a benchmarkingtool which can be used by both purchasers and suppliers

to assess the savings that can be made through the use

of GPC Visa. The tool allows users to create their own

business case for the use of GPC Visa.

User Groups

Visa Europe and OGCbuying.solutions support a number

of regional user groups. These groups provide a more

frequent opportunity for GPC Visa users to network and

share their experiences and have proved very popular

with attendees. Details of User Groups and other events

that may be of interest to GPC Visa users are posted on

www.purchasingcard.info.

GPC eSolutions

GPC eSolutions is a web-based management information

system which has been specifically developed for GPC

Visa users. Visa Europe and OGCbuying.solutions have

jointly supported this project to make a cost effective

solution available to the GPC Visa community.

GPC eSolutions allows cardholders and budget holders

to review all of their GPC Visa transactions online.It provides the functionality to approve transactions,

automate cost coding and allocation of transactions and

provides online spend visibility and analysis. The system is

fully scalable depending on each organisations individual

requirements.

The system has been packaged such that the customer

can choose from one of four entry points, known as

bronze, silver, gold and platinum. The bronze solution

provides the basic functionality required by anyorganisation and is available at no cost to GPC Visa users.

More information on GPC eSolutions can be found at

http://purchasingcard.info/esolutions.php.

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Contact details

Barclaycard BusinessDept. CJ1234 Pavilion DriveNorthamptonNN4 7SG

Contact: Terry NoblePhone: 01604 254 661Email: [email protected]

The Co-operative BankCo-operative & Sector DevelopmentLevel 31 Balloon Street

ManchesterM60 4EP

Contact: Paul EdwardsPhone: 0161 829 5303Email: [email protected]

Lloyds TSBLloyds TSB Bank PLCGreat Surrey House203 Blackfriars RoadLondon

SE1 8NH

Contact: Vishal PatelPhone: 0207 463 1235Email: [email protected]

NatwestCommercial Cards7th Floor2 1/2 Devonshire SquareLondon EC2M 4BA

Contact: Alan FoxPhone: 01480 462892Email: [email protected]

Royal Bank of Scotland GroupCommercial Cards7th Floor2 1/2 Devonshire SquareLondon EC2M 4BA

Contact: Alan FoxPhone: 01480 462892Email: [email protected]

Ulster Bank LimitedUlster Bank - Commercial Cards5th Floor11-16 Donegall Square East

BelfastBT1 5UB

Contact: David HolmesPhone: 0845 3660666Email: [email protected]

OGCbuying.solutions5th FloorRoyal Liver BuildingPier HeadLiverpool

L3 1PE

Contact: Customer ServicesPhone: 0845 410 2222www.ogcbuyingsolutions.gov.uk

Visa EuropeGovernment Services TeamCommercial SolutionsPO Box 39662LondonW2 6WH

General EnquiriesPhone: 020 7795 [email protected]


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This report was written and

produced by Ticon UK Ltd, 2008

www.ticon.uk.com

The data used to compile this

report was provided by various

departments and banks and

has not been audited by Ticon,

Visa Europe or OGCbuying.

solutions. Ticon, Visa Europe and

OGCbuying.solutions accept no

responsibility for the accuracy of

this data.

GPC Annual Report 2007

Documents

Transcript of GPC Annual Report 2007